NYS budget will be late as leaders continue talks on tax cuts, cellphones in schools ban

ALBANY — Gov. Kathy Hochul and legislative leaders this week will negotiate a late state budget that will increase spending despite the threatened loss of billions of dollars in federal aid, provide a $3 billion tax cut for most New Yorkers and include several significant policies, including a "bell-to-bell" ban on student cellphones in schools.

The budget is constitutionally due by Tuesday, which is the start of the 2025-26 fiscal year. But that deadline, as in most years, will be missed. Closed-door talks won't resume until Tuesday after the Monday observance of the Muslim holiday Eid al-Fitr.

Legislative leaders are planning to pass an "extender" that will maintain spending under the lapsing state budget through this week, but more extenders can be approved until a new spending plan is passed.

Of all the major issues being negotiated behind closed doors, the student cellphone ban appears most likely to gain approval in a $252 billion budget deal, according to legislative leaders.

Hochul has proposed a "bell-to-bell" ban on student cellphones in schools to reduce distraction in the classroom and improve instruction. Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers) and Assembly Speaker Carl Heastie (D-Bronx) said their Democratic conferences favored the concept, but there was pushback.

Some parents feared loss of contact from their children in emergencies while some school officials bristled at another mandated policy from Albany. These critics called for local control — a touchy political issue for state officials dependent on local support — and to leave the policy up to school boards which already have the authority to set such policies.

"I think the majority of members are more comfortable with ‘bell-to-bell,’" Heastie told reporters last week.

Stewart-Cousins in a separate news conference said her majority conference also is "comfortable with a ‘bell-to-bell’ ban." She said a provision is likely to allow school districts to continue their own policies if they are effective.

But just when that budget deal will be made is uncertain.

Also dominating the closed-door talks are Hochul’s proposals to send tax rebate checks of up to $500 to families making less than $300,000 a year and $300 to single filers making less than $150,000 a year; $3 billion in additional tax breaks for families making less than $323,000 a year; an increase in school aid of nearly $1 billion to $2.7 billion above current spending at $34 billion; and paying for all of it partly by extending a temporary income tax surcharge on New Yorkers making more than $2.1 million a year to raise $5 billion in revenue.

While there is broad agreement on those concepts, the details are in dispute.

"We don’t have a lot nailed down," Heastie said.

Hochul said Wednesday she is pushing "a common-sense agenda that delivers real relief and lifts up middle-class families." She calls the budget proposal an "affordability agenda."

Hochul’s $252 billion budget proposal would increase state operating funds spending by $10.5 billion, or 7.9%, according to a February analysis by state Comptroller Thomas DiNapoli.

The independent Citizens Budget Commission said counterproposals by the Democratic majorities of the Senate and Assembly would bring that total increase to as much as 13.8%.

"Although the stated theme is affordability, the proposals add billions of dollars in spending to an already inflated spending plan and layer additional tax increases onto New York’s chart-topping taxes," said the CBC’s analysis released Tuesday.

And there may be another wild card.

Legislative leaders said they and Hochul are seeking more revenue for the Metropolitan Transportation Authority to fund operations and renovations needed for mass transit, including the Long Island Rail Road. That could include a higher tax likely aimed at the largest corporations in New York City, legislators said.

The need for new state revenue is compounded by President Donald Trump’s threats to reduce federal aid that has gone to the MTA.

"We bounced around a bunch of ideas," Heastie said. "But we all decided we know we are going to have to come up with funding."

Legislative leaders and Hochul won’t disclose what options are being considered, which has drawn rebukes.

"Albany Democrats’ complete lack of fiscal responsibility is staggering," said Assemb. Alec Brook-Krasny (R-Brooklyn). He said an independent audit of the MTA is needed to root out what he considers massive waste and improve efficiency.

"The notion that taxpayers should foot the bill for [the MTA] is laughable," the Republican said in a statement.

But whatever the final budget includes, that may not be the end of the story.

"The process is tedious because of what we see on the horizon coming from our Republican colleagues in Washington," Stewart-Cousins said. "It really is difficult and deeply disturbing."

Hochul, Heastie and Stewart-Cousin have embraced a strategy under which they will adopt a standard state budget, making no concessions or plans to address the threatened cuts from Washington.

"One-third of New York State's budget, $90.8 billion, comes from the federal government," said Patrick Orecki of the Citizens Budget Commission. "The state should reserve at least $2 billion of the fiscal year 2025 surplus as a contingency fund to mitigate the initial impact of federal cuts. The state will not be able to backfill federal aid reductions dollar-for-dollar, which is why lawmakers need to restrain spending growth now."

Trump and Congress pledge to cut billions of dollars in aid to the state, claiming without proof there is massive waste. If approved by Congress and the courts, the cuts would force the State Legislature into special session in the fall to cut spending, while blaming the pain on Trump and the narrow Republican majority in Congress.

"We do have seven Republicans in the majority that, if they had the strength, they could actually assure that New Yorkers are protected," Stewart-Cousins said Wednesday.

Pressure is now building to pass a late budget before Trump details his promised cuts. Heastie estimated federal cuts would cost New York $5 billion in Medicaid health care coverage and aid for hospitals as well as $4 billion for schools.

"Like Yogi Berra said," Heastie said, paraphrasing the baseball philosopher, "It’s getting late early." 

CORRECTION: The name of the Muslim holiday Eid al-Fitr was incorrect in a previous version of this story.

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.